WASHINGTON, Nov. 14 — Democratic presidential hopeful John Kerry has decided to opt out of the post-Watergate public financing system and will take out a personal loan to help fund his struggling White House bid.

KERRY BECOMES the second Democratic presidential candidate to abandon the system, but unlike rival and prolific fund-raiser Howard Dean, he plans to keep his spending to the $45 million limit for the primaries — if he can raise that amount. Kerry will not follow state-by-state limits in early voting states such as Iowa and New Hampshire, his campaign said.

“He (Dean) changed the rules of this race, and anybody with a real shot at the nomination is going to have to play by those rules,” Kerry said in Iowa Friday.

Kerry’s move marks the first time in Democratic history that two contenders for the nomination have abandoned the system created after the Watergate scandal some 30 years ago. It also is the first time candidates in both major parties are skipping public financing for the primaries.

SHAKEUP IN CAMPAIGN

“As you all know, this has been a difficult week in our campaign, but I’ve been in tougher spots than this before, and I’ve fought back and won,” said Kerry, a decorated Vietnam War veteran. “That fight begins today with a decision I’m making to give up federal matching funds in this campaign.”

The Massachusetts senator fired his campaign manager on Sunday, then lost his chief spokesman and deputy finance director, who quit within days. Kerry compounded the problem on Thursday, telling The Associated Press that his campaign would be “better off” without them. He later called the three former aides to apologize for the remarks.

There was some confusion again Friday as the Kerry campaign said the candidate would take out a personal loan, but Kerry said in Iowa that he had not made a decision. In a telephone interview with the AP, Kerry sought to clarify, saying he would use his personal money, in the millions of dollars, and would do so through a loan. Declining to provide a figure, he said he will spend “as appropriate.”

Kerry’s decision to skip the $18.7 million in public money comes despite a slowdown in his fund-raising after a promising start and the acknowledgment by his campaign that he cannot tap wife Teresa Heinz Kerry’s multimillion-dollar Heinz food fortune for the race.

Under campaign laws, Kerry can take out loans on the full value of property he owns and on half the value of property he co-owns. His wife can co-sign loans if the bank requires, but she cannot pay them back. She is limited to the $2,000 individual donation.

The Massachusetts senator has reported investments valued at about $700,000 to $2.4 million and up to $600,000 worth with his wife. Kerry advisers have said he has several million dollars of his own money he could tap for his race; if any resulted from gifts or asset transfers from his wife, Kerry would have to show he received them before starting his presidential campaign.

Kerry is not the first presidential hopeful to invest substantial personal resources in his bid. Republican Steve Forbes and Reform Party choice Ross Perot each spent millions on their candidacies.

SPECIFIC PLEAS

Earlier this year, Kerry sent out fund-raising letters, urging people to help him accumulate matching funds should he decide to take public financing. The campaign will let those donors know of his decision to opt out so they can get their money back.

Dean made history Saturday when he became the first Democrat to decide to skip the program, which offers a taxpayer-funded match of up to $250 for each contribution, up to a total of $18.7 million.

President Bush opted out in the primaries in 2000 and for 2004; his re-election campaign is already eclipsing the record $106 million he raised in 2000.

Democratic strategists have worried their nominee-to-be would emerge from the primaries broke if he or she accepted public financing and its spending limits as Bush, with no GOP opponent, had tens of millions left to spend next spring and summer.

Kerry began this year as one of the top fund-raisers in the Democratic race, and was the first to say he was considering skipping public financing. He raised $7 million from January through March, second only to North Carolina Sen. John Edwards’ $7.4 million. Dean began the year raising only about $2.6 million in the first quarter.

But like many others in the nine-member Democratic field, Kerry’s fund-raising totals have fallen while Dean’s have soared; in the quarter ending Sept. 30, Dean raised $14.8 million, compared to $4 million for Kerry. Dean led the field with about $25 million, and Kerry was second with about $20 million.

The race’s newest candidate, Wesley Clark, announced Thursday he will accept the so-called matching funds, joining Dick Gephardt, Edwards and Joe Lieberman. Lieberman on Friday challenged Kerry and Dean to abide by overall and state spending caps.